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4.49 pm

Linda Perham (Ilford, North) (Lab): My starting point in this debate is that there is a threat to four of the 13 post offices in my constituency—plus one just along the road from my home, which was closed a few months ago, because of a dispute between the postmaster and the council over the lease, which means that five out of 13 may go. However, I am working with Postwatch to see what support there is for keeping those post offices open—Claybury Broadway, Great Gearies, Tring Close and Woodford Bridge.

On 29 November, I met large numbers of residents at each of those post offices—mainly elderly or disabled people or young parents, all concerned about the alternative facilities available. Some of these alternative branches are more than a mile from the closing post

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offices—this in Greater London, in a London borough with nearly a quarter of a million residents. One of the main alternative post offices, in Barkingside high street, already has queues stretching out of the door, so that is not really much of an alternative. Many residents have now signed petitions and flooded my office with responses and reasons why they want to retain their local branch.

Of course no one wants to see the loss of a community resource. I prefer to call local post offices "shops in a social setting", because that is what they have become. However, it is all too easy to blame the Government of the day for failing to prevent post office closures and in particular at present to point the finger at the introduction of the direct payment of benefits. The debate on the Committee report is therefore timely; as a member of the Committee, I have taken a great interest in this issue.

One conclusion of our report commended the assurances of Post Office Ltd. that it would make decisions about the future of individual post offices by reference to strategies for communities and areas, rather than in isolation; but I am not convinced that the programme of closures can be termed strategic if the postmasters or mistresses are volunteering to go, because it could lead to under-used post offices staying open while well sited, better-supported post offices are shut—such as Woodford Bridge in my constituency, which is in quite a large shopping parade.

The Committee voiced concern at the reduction in customer choice with the phasing out of order books, which my hon. Friend the Member for Ochil (Mr. O'Neill) mentioned. It questioned the savings expected for using the increase of direct payment to combat fraud. It questioned the failure to have in place "exceptions" procedures for blind or other disabled people, and—the point that my hon. Friend emphasised at the beginning of his remarks—criticised the accuracy of information on the options and the unnecessary complications involved in opening a Post Office card account.

A couple of days ago I received a letter from a constituent about the fact that he had filled in no fewer than six forms for such an account, only to be rejected by the Post Office. He wrote that

Our report was very well received, especially by the Communication Workers Union and the National Federation of Sub-Postmasters. My constituent, Iain Stanford, the counters sectional secretary of the CWU in Romford, wrote to me on 21 November, saying that

However, both organisations expressed their disappointment in the Government's response to the report, published on 16 September, and both are critical of the DWP's approach on direct payments. The CWU claims that the DWP intends to move nine out of 10 new claimants to direct payment as quickly as possible. Indeed, in a written answer to the hon. Member for Vale of York (Miss McIntosh) on 8 December 2003, at column 321–22W, the Minister, my hon. Friend the Member for Gravesham (Chris Pond), said that the

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DWP had published a public service agreement that by 2005, 85 per cent. of customers would have their benefits paid by direct payment.

There is no doubt that in recent years the Post Office, even though it is a monopoly, has managed to lose millions of pounds, including £194 million last year. It has had and is having considerable problems. There is equally no dispute that hundreds of post office branches have closed in each of the past 20 years, the worst so far being 1991–92, when 478 shut. Since DP was introduced in the early 1980s, increasing numbers of people are opting for it.

I should like hon. Members to take note of something that the Select Committee said in the summary at the beginning of the report:

We as a country must face up to the consequences of changes in lifestyle and habits, which have led to those with the best transport options expressing their choice to range further afield to gain access to consumer goods and services, so that we make the best provision that we can for those with restricted transport availability.

I welcome the Government's assistance to the Post Office, including investment grants to improve post offices and other substantial financial support running into hundreds of millions of pounds, as the Prime Minister pointed out a couple of weeks ago. I strongly reinforce the Select Committee's recommendation that urges the Post Office to make progress on introducing new business activities and flexible working to open new possibilities to maintain a healthy local post office network. I note that when the Minister replied to the debate on post office closures in Wales on 9 December, he said the company had been slow to develop new income streams and offices had become over-dependent on making benefit payments.

As has been requested, the Select Committee promised to return to the impact of DP on the post office network's income and on individual sub-postmasters and mistresses, and to monitor the progress of the urban reinvention programme and the effect of Government support for rural post offices in the near future. On those extremely important matters, which have caused so much interest in the House and throughout the country, our constituents—certainly mine—would expect no less of us.

4.57 pm

Sir Robert Smith (West Aberdeenshire and Kincardine) (LD): This debate is welcome as we are trying to focus the Government's mind on some of the key issues that the Chairman of the Select Committee on Trade and Industry raised in opening the debate. This is about a fair choice for the customers. Forty-four rural post offices are left in my constituency, and I am pleased to say that I have been able to attend the reopening of some that had closed. I recognise how vital they are to many communities, but the people who want to use those post offices have grown up with different lifestyles, different ways of working and different ways of

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operating their money. It is arrogant of the Government to assume that they know best about how people should operate and that they must have bank accounts and run their weekly budgets using them. It is the Government's desire to force people down the road faster than they wish to move.

The move to direct payment was an option; it was part of the fair choice. No one can deny people the right to use their banks to manage their benefits, but if they wish to separate their savings in a bank account from their weekly cash budget by taking that through post offices, they should be entitled to do so as easily and simply as though they were doing so through a bank, and they should not have to go through hoops to open a Post Office card account. The submission from Postwatch suggests three ways to make that simpler, so the Government need to reconsider the current options and recognise that, even if they have written to people with an invitation to migrate to direct payment, that should be the only trigger that they need to go to the post office and start the process, as though they were opening a bank account. Why do people have to go through hoops if it is not to put barriers in their way? There is no explanation from the Government.

As the hon. Member for South Derbyshire (Mr. Todd) made clear, the Government need to recognise the danger of the kind of advice that they are giving to people, given the pace at which they want them to transfer their way of operating. If people move their weekly traditional cash budgeting even to a basic bank account they may be told that they cannot go overdrawn, but there is a great danger that they will lose control of their budgeting if they switch to systems that allow automated payments to come out of their accounts. If people are living on the basic minimum that the Government provide to protect them from poverty, the last thing that they want is a £30 letter from the bank saying that they are overdrawn.

Clearly, the Government are in danger of going too fast down that road and, by accelerating the process, they have accelerated the challenge for the Post Office. If they had allowed things to move at the pace at which customers were adapting naturally, the Post Office could have adapted its services to the way in which the market was moving. Because the Government have accelerated the pressure on our sub-post offices, the Department of Trade and Industry must now pick up the pieces at the other end of the scale and try to sort out the mess facing post offices to keep them open. The Government have promised people that they will still be able to collect their benefit at the post office, but that is a hollow promise if there is no post office from which to collect it. I hope that the Government, who promised on page 6 of their reply to send the Committee follow-up research on the cost-benefit analysis in October, will deliver that research eventually. It would be helpful to know when they plan to do so.

If the Government are so confident about the way in which they are handling this matter, they should also respond more positively to Postwatch's request to send out research material, the production and postage cost of which Postwatch will pay for. The Government's excuse for not allowing Postwatch direct access to consumers is data protection, but they could do more to work with Postwatch to facilitate its research, which

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could reassure us and the wider public about how the system is being processed.

I repeat that the key is to operate a fair choice. The National Federation of Sub-Postmasters has pointed out that, in reality, there are eight steps to opening a Post Office card account. That is a long-drawn-out process, and the Government need to look at that again if their reassurance is genuine that people who are entitled to a Post Office card account, and who want one, should have an easy option.

The final point that the wider public need to understand from this debate and the information provided by the Government is that if they want to stick with their pension book, for the moment, they can do so, and they are entitled to do so. They are entitled to say, "Don't rush me, I want to carry on using my pension book." We need to reassure people that the pension book is still there for the moment. I welcome the movements being made on the exceptions service, and reassurance is also necessary in that regard. Above all, a fair, level playing field is required—for those people who want to stick with their post office and the card account, opening a card account should be as easy as if it were a bank account.

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